Gold Below $1300 on Fed Taper Speculation

Gold tumbled 2 percent, the most in 16 weeks, on speculation that a gain in U.S. consumer prices will give the Federal Reserve more leeway to reduce monetary stimulus. Palladium fell for the first time in six sessions.

The consumer price index rose 0.2 percent, government data showed today, topping the 0.1 percent forecast in a Bloomberg survey of economists that matched the gain in the prior month. Fed officials debated whether to signal a concern with too-low inflation when they met March 18-19. Data this week showed U.S. retail sales in March increased more than economists forecast.

A year ago today, gold plunged 9.3 percent, the most in three decades, partly on concern the Fed would taper stimulus. In 2014, the price climbed as much as 16% amid signs of a faltering U.S. economy and escalating tensions between Russia and Ukraine that boosted demand for a haven.

Bloomberg

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